County budget: borrow less to keep levy flat
Washington County may delay borrowing for a voter-approved land acquisition program, reduce road and building projects and cut other spending to keep next year's property tax levy flat.
County commissioners directed staff to target those areas for savings as they work toward a 2011 budget that requires no additional property tax revenue.
The Washington County Board will not finalize the budget until December, but members voted 4-1 last month to set the preliminary 2011 property tax levy at its current level. That would result in a small cut in the county portion of property taxes paid on some homes, staff said.
County leaders had proposed a 1.5 percent levy increase. So without that increase, $1.3 million must be cut from next year's proposed budget, Washington County Administrator Jim Schug said.
The $1.3 million in cuts would come from an estimated $180 million budget. County officials say 80 percent of county spending is mandated by state or federal programs.
County commissioners are leaning toward a three-part solution:
-- The county had planned to borrow $10 million for the Land and Water Legacy program, to buy valued open space properties throughout the county. Voters approved the program in 2006, permitting up to $20 million in bonding; the funds are repaid with property tax revenue.
Commissioners said the county only should borrow $5 million for 2011, which would save about $690,000 next year in bonding and debt service costs.
There are $3.6 million worth of finalized and pending property purchases, staff said. The remaining $1.4 million could be used if other property owners want to sell land sought by the county.
Commissioner Gary Kriesel said borrowing less money could force the county to be more selective in its purchases.
"I'd like to see a better prioritization of the properties that would actually get this money," said Kriesel, who represents Afton.
-- Spending less on capital improvement projects could save another $522,000, commissioners said. The county had planned to borrow $38 million for capital improvement projects, but the revised plan calls for $35.9 million in borrowing. That would delay some projects. A revised capital improvement plan will be released next week, said Molly O'Rourke, deputy county administrator.
-- The remaining roughly $80,000 would come from cuts to county operations. Commissioners told staff to develop budget-cutting options and report back to the County Board.
Even as they directed staff on how to make the spending cuts, commissioners still are debating the budget approach.
Commissioner Myra Peterson of Cottage Grove said borrowing less for the Land and Water Legacy program is an "obvious" solution, but she wants the county to look for other spending reductions.
Peterson reiterated that she reluctantly voted to keep the property tax collections from increasing next year.
"I'm very concerned that we have boxed ourselves into a corner and we have few choices," she said.
Kriesel said he supports freezing the levy next year.
"I think what we're trying to do is stem the tide right now," he said, "and hopefully the economy shows some improvement."